| SAO PAULO
SAO PAULO Feb 28 Usinas Siderúrgicas de Minas
Gerais SA, Brazil's largest flat steel producer,
plans to increase prices for some products as early as Friday,
in a bid to boost profit margins, a source with knowledge of the
situation told Reuters.
Usiminas, as the company is known, informed distributors
that prices for hot- and cold-rolled steel, coil and coated
products could be increased between 6 percent and 8 percent. The
increases, which take effect March 1, come on top of an average
5 percent hike carried out in January, said the source, who is
not authorized to speak on the record.
Usiminas' decision comes at a time when the government has
shown preoccupation with inflation, which is climbing at its
fastest pace in a year. In recent weeks, Usiminas rivals such as
Cia Siderúrgica Nacional SA have announced a series
of price hikes, while paper and pulpmaker and petrochemical
companies ramped up prices for wholesalers to restore margins.
Steelmakers in Brazil will likely witness a recovery in
sales and a reduction in excess capacity next year as recent
government measures to revive growth are bearing fruit,
Instituto Aço Brasil, the group representing the sector, said in
News of price increases are generally seen as encouraging
for mills, which have grappled with global steel overcapacity
and weak prices, rising costs for some raw materials such as
coal, and a domestic output glut over the past three years.
Distribution companies consulted by Reuters have also said
that Cia Siderúrgica, known as CSN, is also testing the waters
with a potential increase for March. Both Usiminas and CSN
declined to comment.